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Compete with mass-merchandisers on the natural front

Target and Walmart have rolled out natural and organic initiatives recently. But independent retailers can still have a leg-up on these mass-merchandisers when it comes to natural products merchandising.

In the past few months both Target and Walmart made major announcements regarding their commitment to sell more natural and organic products. While this makes the quality natural products that we enjoy available to a larger number of potential shoppers, this also creates some challenges for natural retailers.

Target recently announced that it has handpicked 17 “Made to Matter” trusted natural brands to feature with limited time exclusives at their stores. The retailer cherry-picked some of the top natural brands to draw consumers in and increase natural product awareness. The strategy will also infuse its stores with the flavor of new natural product trends and innovation by featuring the 17 brands through special merchandising and features.   

For its part, Walmart announced it will be reviving the Wild Oats brand. It will be a quasi private-label initiative with a limited product rollout in about half of its U.S. stores. The mass-merchandiser promises a significant price reduction compared to other similar natural brands.    

The challenge, as I've said in most all my articles, is that conventional grocery retailers and mass-merchandisers (Target and Walmart) have the potential of outselling traditional natural retailers as a whole because of the sheer number of shoppers that frequent their stores. A superstore may see as many visitors in one day as some natural retailers see in an entire year.

The good news is that while conventional grocery retailers and mass-merchandisers are focused on a select number of items, traditional natural retailers carry a much broader assortment that can better meet the needs of the health-conscious consumer.  Natural retailers have their finger on the pulse of the natural products universe.  It’s where you go to see new product trends and new product concepts before they appear in other channels.

So, how do natural retailers compete against Target and Walmart’s new initiative?  First, natural retailers need to be very price conscious on the top selling items found in conventional grocery retailers and mass-merchandisers. Let’s call this your competitive set.  When possible, those items should be aggressively promoted to draw shoppers into your store.  Shoppers will use those items to compare your product selection and the perceived value between you and your competition. It's imperative that you maintain distribution on all of these items to truly be competitive.  Once shoppers perceive you to have a great selection and fair prices, they will be open to considering the many unique items you carry that are not available anywhere else.  Those items are where you build excitement, consumer loyalty, and drive margin.  

The achilles heel of conventional grocery retailers and mass-merchandisers is their inability to remain innovative and creative in terms of their natural product selection.  Your competitive set brings shoppers into your store. The other items will keep them coming back. Your incredible customer service and your knowledgable sales staff are what converts them to loyal committed natural shoppers.

What is your strategy for competing against other retailers? 

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